London (CNN) -- News International chief James Murdoch rejected allegations Thursday his company behaved like a Mafia organization over the News of the World phone-hacking scandal.
The accusation was put to the son of media tycoon Rupert Murdoch as he faced questions from lawmakers about what he knew and when. It is alleged that his company's newspaper intercepted cellphone calls and messages of almost 5,800 royals, politicians, celebrities and business leaders -- and most controversially of all, a 13-year-old murder victim.
Public outrage over the scandal later led News International to close the best-selling tabloid in July and abandon a bid to take over British broadcaster BSkyB.
Questioning Murdoch about why so little information was shared, Labour Member of Parliament Tom Watson suggested the company operated an "omerta" code of silence. He said the "omerta" was "a group of people who are bound together by secrecy, who together pursue their group's business objectives with no regard for the law, using intimidation, corruption and general criminality."
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"Would you agree with me that this is an accurate description of News International in the UK?" Watson asked.
Murdoch replied: "Absolutely not, I frankly think that's offensive and it's not true."
To gasps of amazement from fellow MPs on the Culture, Media and Sport Committee, Watson went on: "You must be the first Mafia boss in history who didn't know he was running a criminal enterprise."
Murdoch rolled his eyes, before saying that comment was "inappropriate."
He said he "disputed vigorously" the version of events described by former News of the World editor Colin Myler and its former legal manager Tom Crone, who both left the company when the tabloid was closed.
Myler and Crone claimed they made Murdoch aware of the contents of the so-called "for Neville" e-mail in 2008, indicating phone-hacking was widespread. The document is known as the "for Neville" e-mail, apparently after its intended recipient Neville Thurlbeck, then News of the World's chief reporter.
CNN's Atika Shubert said Murdoch was caught in a "Catch-22" situation: if he wasn't aware of the extent of phone-hacking when the company paid an out-of-court settlement of $1.2 million to one victim, he could be seen to be incompetent; if he did know about it, it could be regarded there was a cover-up.
Murdoch has maintained he only found about the full extent of phone-hacking by staff and investigators at News of the World in 2010 and was not shown the e-mail.
Asked by Watson if he had misled the committee during his previous high-drama appearance alongside his father in July, Murdoch said: "No, I did not."
He added: "I believe this committee was given evidence by individuals either without full possession of the facts, or now it appears in the process of my own discovery ... it was economical."
Asked if he was accusing Myler and Crone of misleading the committee, Murdoch replied: "Certainly in the evidence they gave to you in 2011 in regard to my own knowledge, I believe it was inconsistent and not right, and I dispute it vigorously."
Questioned about the "for Neville" e-mail that included transcripts of 35 hacked conversations, Murdoch denied again having seen it.
His statement contradicted a letter Crone wrote to lawmakers in the summer saying he had "no doubt" Murdoch was aware of the e-mail in a meeting before he signed the check for $1.2 million.
Murdoch said Thursday: "I want to be very clear. No documents were shown to me or given to me at that meeting or prior to it."
Taking a contrite tone, Murdoch told lawmakers that the scandal had "humbled" the whole company and that he was "very sorry" about what had happened.
He also said the company had "moved into an aggressive defense too quickly" when some of the claims were made against it in early 2010.
If he had known then what he knows now, he said, he would have acted differently.
Murdoch's position at the helm of News International is widely believed to have been jeopardized by the scandal, which has cost its parent company $150 million. Amid the furore, the Murdochs abandoned their attempt to buy the shares they did not own in British broadcaster BSkyB.
Thursday's hearing came only days after News International admitted the Sunday tabloid hired a private detective to spy on lawyers defending hacking victims. Murdoch said he had no knowledge of the "appalling" and "unacceptable" action for which he apologized "unreservedly."
The phone-hacking scandal blew up in July when News International admitted investigators hacked into the phone of missing teenager Milly Dowler, deleting messages to allow room for more. This gave the 13-year-old's family hope that she was still alive when she was already dead.
Then it was alleged families of soldiers killed in Iraq and Afghanistan as well as relatives of 9/11 victims had been targeted and police officers bribed.
Amid a storm of outrage and a boycott by advertisers, News of the World was closed down shortly afterwards while chief executive Rebekah Brooks and long-time Murdoch aide Les Hinton resigned.
In July the Murdochs were summoned before parliament. At the dramatic appearance, Rupert Murdoch denied he was to blame for the scandal, but declared that this was "the most humble day of my life."
Afterwards, Britain's Prime Minister David Cameron said James Murdoch had "questions to answer in Parliament," after Myler and Crone accused their former boss of giving "mistaken" evidence.
Until this year, News International had maintained that hacking was confined to one rogue reporter, Clive Goodman, and private investigator Glenn Mulcaire, who were jailed in 2007 for intercepting the royal family's phones.
CNN's Laura Smith-Spark contributed to this report.
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